Volkswagen woos BMW, Mercedes buyers in new upmarket push
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Volkswagen’s troubled mass-market brand is pushing upmarket again with a new flagship model a year after ceasing the flopped Phaeton luxury saloon in a bid to lift margins and revive its post-dieselgate image.
Volkswagen (VW), traditionally known for its range of practical saloons, hatchbacks and sport-utility vehicles (SUVs), on Wednesday unveiled the new Arteon fastback to woo customers who like upscale cars like BMW’s 4-Series Gran Coupe or Mercedes-Benz’s CLS coupe but at lower prices.
The four-door Arteon will go on sale in German showrooms next month starting at 34,800 euros ($39,111).
The world’s largest automaker needs higher-margin models to help fund a strategic shift to electric and self-driving cars as it grapples with billions of euros in costs for its emissions scandal.
The Arteon, featuring adaptive cruise control and enhanced emergency braking and steering functions, resembles VW luxury brand Audi’s A5 Sportback with its long wheelbase, extended hood and lowered roofline.
“Cars like this have until now been the domain of premium carmakers,” VW brand chief executive Herbert Diess told reporters. “With the Arteon we are trying to gain a foothold in this business.”
It’s not the first time the VW brand has pushed upmarket. In 2002, it launched the executive Phaeton saloon which was axed last March after never meeting VW’s original sales target of 20,000 cars per year.
VW aims to sell up to 40,000 Arteons a year worldwide, Diess said, about the same as the predecessor CC saloon which ceased production last October.
“Cars like this have until now been the domain of premium carmakers,”
The Arteon is the latest example of a post-dieselgate product overhaul at the VW brand to revive profitability which has been lagging rivals such as PSA Peugeot Citroen and Toyota.
VW will present redesigned versions of the Polo subcompact, one of its all-time bestsellers, in June and the flagship Touareg SUV in September, after it launched an overhauled Tiguan compact SUV last year.
Research firm IHS Markit expects the German brand’s new top-of-the-line model to beat sales expectations easily.
Deliveries of Arteons in core markets of Europe, China and North America may more than double to 81,172 cars by 2025 from 39,265 next year, IHS said.
By comparison, IHS expects sales of BMW’s 4-Series Gran Coupe to plunge 16 percent to 40,562 models by 2025 while it sees sales of the Mercedes CLS jumping 10 percent to 23,856 cars.
IHS says China will account for about half of global sales of the Arteon, which will be built in VW’s biggest market and at a factory in Emden, Germany.
Questions & Answers
Q.What is the primary goal behind Volkswagen’s introduction of the new Arteon model?
What is the primary goal behind Volkswagen’s introduction of the new Arteon model?
Volkswagen aims to lift its profit margins and improve its brand image following the diesel emissions scandal. The Arteon is intended to appeal to customers seeking upscale cars at a lower price point than premium rivals.
Q.How does Volkswagen plan to finance its shift towards electric and self-driving vehicles?
How does Volkswagen plan to finance its shift towards electric and self-driving vehicles?
The company needs higher-margin models, such as the new Arteon, to generate the necessary funds. This strategic shift is crucial as Volkswagen is currently dealing with billions of euros in costs from its emissions scandal.
Q.What sales expectations does Volkswagen have for the Arteon, and how do they compare to the previous model?
What sales expectations does Volkswagen have for the Arteon, and how do they compare to the previous model?
Volkswagen aims to sell up to 40,000 Arteons annually worldwide, which is roughly the same sales target as the predecessor CC saloon. Research firm IHS Markit, however, expects sales to easily beat these expectations.
Q.Which market is projected to be the most significant for Arteon sales, and where will the car be manufactured?
Which market is projected to be the most significant for Arteon sales, and where will the car be manufactured?
China is expected to account for approximately half of the Arteon's global sales. The car will be built in VW's largest market, China, and also at a factory located in Emden, Germany.
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